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ARTICLE IV <br />DISTRIBUTIONS <br />4.1 Normal Form of Benefit <br />Payments to a Member of a Retirement Benefit shall be made in the form of monthly <br />payments commencing pursuant to Section 1.2 and ending on the first day of the month, in which <br />the Member's death occurs, in the amount specified in Section 2.1. The Retirement Benefit shall <br />be subject to an annual compounding cost-of-living adjustment effective on the anniversary date <br />of commencement of the Retirement Benefit. The amount of such cost of living adjustment shall <br />be two percent (2%) per year, provided that the payment for any year shall not exceed the <br />payment that would have resulted from the cumulative application since the date of benefit <br />commencement (on an annually- compounded basis) of the lesser of (i) a two percent (2%) <br />annual increase, or (ii) an annual increase equal to the increase in the Consumer Price Index for <br />All Urban Consumers issued by the Bureau of Labor Statistics. For avoidance of doubt, if the <br />application of the foregoing proviso causes the increase to the payment in any year to be less <br />than two percent (2%), then the increase to the payment in any subsequent year may be greater <br />than two percent (2%). Furtben-nore, in no circumstances shall the amount of the payment be <br />decreased. This form of payment shall be the "Normal Form of Benefit." <br />The Retirement Benefit shall cease for any Member who returns to active CalPERS <br />status and shall recommence as of the first day of the month after the Men-iber returns to retired <br />status under CaIPERS at the same benefit amount and option inii-nediately prior to the suspension <br />of benefits. <br />NB 1 :790420.2 10 <br />